deal architect

Burning Platform: The urgency of thinking about Business as Unusual

In this special 97^th episode of Burning Platform, I invited Geoff Scott, CEO of ASUG to moderate a session with Peter Maier, who heads Strategic Customer Engagements in the Office of the CEO at SAP.

Geoff spends much of the time talking to Peter about his (and Thomas Saueressig) new book, Business as Unusual, that we helped research and write for them. Geoff keeps coming back to the theme of what CIOs and Enterprise Architects can learn from the book, and we provide plenty of reasons why it is worth their while to spend some time, not necessarily read the 300 page book from cover to cover.

No industry has come out unscathed from the recent shocks of COVID, the Ukraine crisis, increasing climate change urgency and massive digital transformations. The book represents across 8 megatrends the massive changes in sectors and countless new edge applications that have become viable, even essential in this changed world. And the book does so in the voice of many customer case studies and partner and analyst commentary.

The graph below shows the 8 megatrends and their relative impact on various industries SAP services

Geoff also probes if a future edition of the book will have more of focus on Generative AI. That leads to the discussion of the current excitement around the technology and the fact that we need a much broader focus on AI and ML for a number of operational applications across most industries.

I love Peter’s comment that he hopes the book encourages customer execs to challenge SAP to solve some of their most complex and unique industry challenges. He invites customers to visit him in Walldorf for a discussion and to pick up a signed copy of the book. He also regularly travels around the world and is very accessible.

An extremely invigorating 40 minute session. Thanks to Geoff for doing a very nice job moderating the flow.   

Burning Platform: A tour of enterprise software world in 30 minutes!

In the 96th episode of Burning Platform, we host John Wookey, a long time veteran of enterprise software world

John is one of the rare execs who has worked in a wide range of software and services companies which have defined the enterprise tech sector over the last few decades. He describes his role at Andersen (now Accenture), Ross Systems, Oracle, Salesforce and SAP. He has worked closely with some of the people who have shaped this industry including Larry Ellison, Marc Benioff, Hasso Plattner, Keith Block and Ken Ross. He has also had a chance to integrate and influence the trajectory of companies like Siebel and Concur after they were acquired.

So, it is not on overstatement to call John one of the best industry market analysts. It was an honor to have him on the show. We broadly cover 4 topics

1. How the next gen of applications will be “data-influenced” – Generative AI is giving vendors a chance to reimagine applications, but it is early days. We discuss challenges and adoption speed among other topics.
2. The verticalization opportunity for application vendors – he explains why vendors need to overcome their caution “ they feel it limits them. If you say you are going after financial services, then they're by default, not going after healthcare or retail. So in a way, I think they feel like by declaring that they actually are or in some ways limiting themselves in other markets. But you have to take that step for a couple of reasons. One is, I think your relevancy to customers in those industries grows tremendously. When you declare and you make that investment. Second, I think the even more important reason is, in order to build especially new types of products based on artificial intelligence and leveraging the data, you will not do that well if you don't have a deeper understanding of customers in those industries.”
3. The localization opportunity for applications. He describes his own experience helping Oracle prepare applications for the birth of the European Union early in the century. He also explains the balancing act “You may not have justification for (a country like Nigeria) as a standalone market. The question is, where the multinational companies you work with? What's their relative importance? And how much do you want to invest to make sure that they have the ability to operate in all the countries that are critical for them? So you're always kind of balancing those two things, the what is the organic (local) market? And then what's the support market you have from a multinational perspective?”
4. We discuss the service sector and why the business model is still so people dependent. John explains why it is so difficult to give up on existing business models. He cites the example of Concur. “At some point, the Singh brothers said, this isn't the future and their stock price took a hit for a couple of years. They made an incredibly courageous decision to shift to the cloud. And I think in the case of systems integrators, I think it will be the same thing. When someone new comes along and says we're going to be tied more to something more value based, something that's more objective outcome driven, as opposed to, you know, hours based, you know and think more about lifetime value of a customer. Until someone else does that and gets to scale, it'll be difficult for them to make that shift.”

Overall, I really enjoy John’s continued optimism and excitement for our sector

“We've always been trying to better approximate the businesses that we're supporting. How do we shape information in a way that makes them more successful. The job really hasn't changed in a lot of ways. It's continued to adapt and evolve, but ultimately, what we're really trying to do is help (customers) be more successful.”

Real honor to have John. I need to bring him back more often.

Watch the entire 30 minutes. He is a delightful font of wisdom. Decades of industry experience and close working with some of the industry’s best talent distilled into this conversation.

 

Burning Platform: Operational Excellence at Bergen Logistics using Zoho

In the 95th episode of Burning Platform, we host Keith Cooper, VP of Customer Experience at Bergen Logistics

This is a two-fer – an overview of Bergen and a discussion about how they have grown explosively and with all kinds of metrics with Zoho

Keith does a nice job (in about 10 minutes starting at 4.48) summarizing Bergen’s focus in the logistics world, particularly for the fashion/apparel sector (the “better-to-luxury” segment), how they have tripled in revenues over the last four years, how their acquisition by Elanders (of Sweden) opens up significant global opportunities, their warehouse management and other software that most of their customers utilize

What’s impressive about Keith is the constant thread of operational excellence. He has taken his continuous improvement mindset from the fulfillment world and applied it to his current role in customer service – terms like volume and velocity flow naturally

He talks about the journey with Zoho, how his staff keep discovering new applications in the Zoho One suite, his global expectations of Zoho, how he is starting to leverage their AI capabilities.  

We then spend some time talking more broadly about AI and use cases which excite him both in the CRM and transportation management areas.

Two very competent and fast growing entities – Bergen and Zoho. Real pleasure to have Keith cover so much ground in about half an hour.

5 goals for the next 5 years

I am about to hit several career milestones – 20 years of Deal Architect, 30 years since I was at Gartner and we coined TLAs like ERP, 40 years since I first implemented a packaged application – they were called COTS back then. So naturally, people ask me or at least wonder if I have plans to retire or in reverse, try to keep up with Ray Wang’s travel schedule😊  After 6+ million airmiles, 3000+ hotel nights, 500+ car rentals across 75 countries, 9 books, 12000+ blog posts, 500+ video episodes, hundreds of advisory projects, countless industry events the body has its fair share of scars. The good news is I have several months of sabbatical time accrued and I could take a month off each year if I chose to.

The reality is I am unbelievably excited about new opportunities in the industry. As I wrote here, we are tracking 4 large software and services markets – hundreds of vertical “edge” applications, applications for fast-growing global economies, custom development using low and no-code tools and Generative and other AI.  

So I have just committed to 5 more years at Deal Architect – actually 3 with an option to extend another 2. I have seen the industry grow through countless architectural shifts. Don’t want to miss the next AI and network driven shift.

Having shared my excitement, let me also share one of my concerns. Some of you have heard me say “when I started my career, companies mostly built, not bought, enterprise applications. It’s been a glorious phase for buying v building. By the time I end my career, I hope the pendulum has not sharply swung back to building”

To make sure it does not end that way, I have set (actually refined) 5 goals to help, in a small way, shape the industry trajectory

Re-imagine business processes

Some of you have heard me say that if Bezos had run a RFP for software for Amazon’s fulfillment centers, he would have ended up with a traditional WMS which had been migrated to the cloud. And they would have likely needed 10x the workforce to fulfill the massive scale of orders they have grown to. Instead, as I wrote here after a tour of one of the centers, Amazon completely re-imagined the old warehouse pick, pack, ship mindset. It's now stow, pick, pack, verify, and in their lingo, SLAM and "chaotic storage". Kiva robots and miles of conveyor belts bring work to employees, not the other way round. Scanners, scales, sensors monitor and facilitate the worker - what size box to assemble, cut right length of packing tape, apply shipping labels etc.  Ditto for BMW’s global SUV manufacturing plant in S. Carolina, Uber’s ride share app, Rolls-Royce Aerospace’s “Power by the Hour” and many others who rethought traditional processes and business models.

The enterprise software industry has been blessed with brilliant architects – Ellison, Plattner, Harris, Chakraborty among them. It has lagged in a similar balance in process visionaries. Its service partners are better at implementing applications as delivered, not leveraged to re-imagining the process flow and UX in the first place. The good news is Gen AI is allowing the industry to rethink applications. But that’s necessary, not sufficient. Software alone cannot eat the world. Robotics, scanners, satellites, drones, sensors, mobile phones all need to be factored. A blend of digital and physical is necessary to re-imagine ecommerce returns, EV battery infrastructure management, telemedicine and many “newer” applications which have become essential in the last few years. The West can also learn from new digital processes and massive scale of mobile technology in markets like China, India and Kenya among others – see some thoughts from Thomas Otter of Acadian Ventures in the Burning Platform episode. 

The increased focus on AI is also highlighting how little enterprise data we actually have in vendor clouds especially that with customer permissions to train machines. Too many vendors glibly talk about how they will leverage “someone else’s” industry or regional data.  It will be a lot easier to re-think and broaden their own process coverage and harvest data that way.

Retire decades-old terms

I go to too many events where we still use dated TLAs (I admit I coined some of them in the mid-90s at Gartner). Two flagrant ones are ERP and CRM. Research firms have armies of analysts who still create Magic Quadrants, Waves and other tools around those TLAs and they parachute in droves to industry events. Worse, vendors spend months responding to questionnaires from these analysts to justify microscopic changes in their annual scorecards.  

We knew this risk at Gartner way back in 1995. We coined an umbrella term, ERP but knew that was a long-term path for customers not a one-time buy.  Analysts were organized by categories of buying centers  - AAS for Administrative Applications, ILS for Logistics, CIM for Manufacturing etc. If anything, we were already issuing warnings that the so called ERP solutions in the market were not really that enterprise wide and you needed to plan for a whole new category of CRM, EAM and other capabilities. In the two decades we should have coined hundreds of new categories – instead we keep using tired old acronyms.

Consumer Reports has an annual New Car issue where they nicely summarize details and scores of 300+ new, not 20 year old, makes and models. Still, do you buy the issue every year? No, you likely only do so in the year when you are in the market for a new vehicle.

It’s the same thing with analyst tools. Buyers look at them when they are in the market for a new piece of software. Oh, once every 20 years. And many have bought into the concept of “composable architectures” – they buy individual pieces of software, not complete suites, to reflect changing business needs.

 I wrote a few years ago:

a) Buyers intently look at such market assessments when they are in purchase mode. Once they move to implementation or steady state, their interest in the next MQ drops dramatically. I think that painful realization came to me in my 3rd year at Gartner.

b) In contrast vendors, especially their AR groups, intently follow each version of the MQ and lobby analysts and create a buzz around each version where they are favorably positioned.

c) Even in evaluation mode, the MQ or Wave is only one (small) influencer. Most buyers go through RFP responses, demos, reference checks, site visits, negotiations in their decision process. Many often find individual calls with the analyst who produced the MQ far more useful than the document itself.

Let’s get away from umbrella, fossilized terms. Let’s talk the language of today’s business.

Prioritize the real influencers – customers

Some of you have heard me say "In the 70s buyers turned to IBM for advice. In the 80s Andersen. In the 90s Gartner. More recently even to Wall Street for guidance. Increasingly, they turn to each other."

Over the last decade, I have been proud to be associated through my blogs and videos with a new generation of market watchers at Constellation, Diginomica, HfS, Redmonk and others. Each has been innovative presenting market trends; however, they mostly summarize vendor perspectives.

We have our fair share of customer contact through advisory projects, book case studies and many other formats we do not publicly share, but one of my goals is to increase focus on that signal source even more going forward.

Rethink ecosystems and economics

For too long, the industry definition of ecosystem has focused on implementation partners and systems integrators and more recently, hyperscalers.  A contemporary definition should also include strategy firms, automation vendors (to cover robotics, drones, autonomous vehicles etc), vertical and regional specialists and research firms, startups and more.

The other focus in ecosystems should be on dramatically shrinking the labor component. Migrations and upgrades are still too expensive, lengthy and low quality because we have not automated many repetitive steps. I am brimming with ideas including use of LLMs to ingest test scripts, data conversion code, training materials and other artifacts from 000s of ERP, CRM and other projects we have done over the last few decades. No need to reinvent the wheel at each project.  I will admit I don’t know how to convince service providers that there is an alternative business model to selling school buses filled with consultants.

Return to Polymath thinking

In 2010, I wrote The New Polymath – I defined it as “an enterprise that excels in multiple technologies—infotech, cleantech, healthtech, and other tech—and leverages multiple talent pools to create new medicine, new energy, and new algorithms.” Most of our books since focused primarily on infotech. Last year I had a chance for help two SAP executives write “Business as Unusual”. Guess what? It was also about new medicine, new energy and new algorithms. I thoroughly enjoyed the experience and refreshing my STEM education by opening up biology, geology and other science textbooks. I expect to do more of that over the next 5 years. If my wife lets me, I may even use the sabbatical time for that😊

The Deal Architect backgrounder describes us

“Deal Architect was founded in 2004 by a former Gartner analyst and PwC consultant. He had worked for 2 decades at those companies in multiple global locations. Each firm had its own competence, but many clients wanted a combination. That led to his philosophy that technology advice and research should be symbiotic - advisory clients should benefit from our research, and our readers should benefit from the practical, field feedback from our clients. Additionally. the advice and content should be ahead of the market and be global, not parochial. For two decades now, we have not strayed from that vision.”

We intend to continue to follow the course.

Of course, every few years, tech vendor leadership changes. Too many vendors miss out on large new markets. IBM and HP allowed rank outsiders with little data center experience like Amazon and Microsoft to dominate the hyperscaler market. Indian IT outsourcers missed out on the much larger contract manufacturing market to the Chinese. CRM vendors lost the digital marketing market to Google and Meta.

Someone will rise to dominate the markets I highlighted at the start. Will it be the incumbents or newcomers? I am putting in my request for a front row seat to watch that play out for the next 5 years.

Burning Platform: The changing “world” of work

In the 94th episode of Burning Platform, we host Thomas Otter of Acadian Ventures

Thomas talks about their HCM startup investments across 17 countries. As he says 3.3 billion people go to work every day – most of them in emerging economies. Not only do they represent a significant market opportunity, we can also learn from them – as in innovative use and massive scale of mobile/SMS technologies in some of these markets.

He emphasizes democratization in terms of access to platforms. “So, 15 years ago, if you were trying to build a software company in Africa, in, say, Kenya, you needed to find a data center, you needed to support the infrastructure and that was really difficult whereas today you've got a choice in Nairobi, between AWS, Azure and Google. The developer in Kenya, has access today to the same coding environments, the same infrastructures, the same technologies that a developer anywhere in the world has access to, so that boundary is now gone. You can build great software anywhere in the world.”

He discusses a slew of use cases serviced by their portfolio of startups. Some of the ones he mentions in the conversation include

• Worky, Mexico City, Mexico
• Techwolf, Ghent, Belgium
• AG5, Amsterdam, The Netherlands
• Figures, Paris, France
• Fifty, Paris, France
• Brio HR,  Malaysia / Singapore
• Palm HR,  Riyadh, Saudi Arabia
• Workpay, Nairobi Kenya
• Arist  remote USA
• Compa  remote USA
• Holiva, Marseilles, France

He also describes how by leveraging other VCs like Workday Ventures and accelerators like SAP.iO Foundries, his relatively small fund manages to have such a global reach.

Fascinating conversation about the changing “world” of work in about 35 minutes.